Edgar Filing: MID AMERICA APARTMENT COMMUNITIES INC

MAA.9.30.2014 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 001-12762 (Mid-America Apartment Communities, Inc.)

Commission File Number 333-190028-01 (Mid-America Apartments, L.P.)

MID-AMERICA APARTMENT COMMUNITIES, INC.

MID-AMERICA APARTMENTS, L.P.

(Exact name of registrant as specified in its charter)



Tennessee (Mid-America Apartment Communities, Inc.)	62-1543819
Tennessee (Mid-America Apartments, L.P.)	62-1543816
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)



	6584 Poplar Avenue, Memphis, Tennessee, 38138
	(Address of principal executive offices) (Zip Code)



	(901) 682-6600
	(Registrant's telephone number, including area code)

	N/A
	(Former name, former address and former fiscal year, if changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Mid-America Apartment Communities, Inc.	YES R	NO o
Mid-America Apartments, L.P.	YES R	NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Mid-America Apartment Communities, Inc.	YES R	NO o
Mid-America Apartments, L.P.	YES R	NO o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Mid-America Apartment Communities, Inc.
	Large accelerated filer R	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
			(Do not check if a smaller reporting company)
Mid-America Apartments, L.P.
	Large accelerated filer o	Accelerated filer o	Non-accelerated filer R	Smaller reporting company o
			(Do not check if a smaller reporting company)



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Mid-America Apartment Communities, Inc.	YES o	NO R
Mid-America Apartments, L.P.	YES o	NO R

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:



	Number of Shares Outstanding at
Class	October 27, 2014
Common Stock, $0.01 par value	75,254.249

MID-AMERICA APARTMENT COMMUNITIES, INC.

MID-AMERICA APARTMENTS, L.P.

TABLE OF CONTENTS



		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
Mid-America Apartment Communities, Inc.
	Condensed Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013 (Unaudited).	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 (Unaudited) and 2013 (Unaudited).	5
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2014 (Unaudited) and 2013 (Unaudited).	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 (Unaudited) and 2013 (Unaudited).	7
Mid-America Apartments, L.P.
	Condensed Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013 (Unaudited).	8
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 (Unaudited) and 2013 (Unaudited).	9
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2014 (Unaudited) and 2013 (Unaudited).	10
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 (Unaudited) and 2013 (Unaudited).	11

	Notes to Condensed Consolidated Financial Statements (Unaudited).	12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	52
Item 4.	Controls and Procedures.	52

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	53
Item 1A.	Risk Factors.	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	54
Item 3.	Defaults Upon Senior Securities.	54
Item 4.	Mine Safety Disclosures.	54
Item 5.	Other Information.	54
Item 6.	Exhibits.	55
	Signatures.	56
	Exhibit Index.	58

Explanatory Note

This Report combines the quarterly reports on Form 10-Q for the quarter ended September 30, 2014 of Mid-America Apartment Communities, Inc., a Tennessee corporation and Mid-America Apartments, L.P., a Tennessee limited partnership, of which Mid-America Apartment Communities, Inc. is the sole general partner. Mid-America Apartment Communities, Inc. and its 94.7% owned subsidiary, Mid-America Apartments, L.P., are both required to file periodic reports under the Securities Exchange Act of 1934, as amended.

Unless the context otherwise requires, all references in this Report to “MAA” refers only to Mid-America Apartment Communities, Inc., and not to any of its consolidated subsidiaries. Unless the context otherwise requires, all references in this Report to "we," "us," "our," or the "Company" refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, the references in this Report to the “Operating Partnership” or “MAALP” refer to Mid-America Apartments, L.P. together with its consolidated subsidiaries. “Common stock” refers to the common stock of MAA and “shareholders” means the holders of shares of MAA’s common stock. The limited partnership interests of the Operating Partnership are referred to as “OP Units” and the holders of the OP Units are referred to as “unitholders”.

As of September 30, 2014, MAA owned 75,242,266 units (or approximately 94.7%) of the limited partnership interests of the Operating Partnership. MAA conducts substantially all of its business and holds substantially all of its assets through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership's sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership.

We believe combining the quarterly reports on Form 10-Q of MAA and the Operating Partnership, including the notes to the condensed consolidated financial statements, into this single report results in the following benefits:


•	enhances investors' understanding of MAA and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business;


•	eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report applies to both MAA and the Operating Partnership; and


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. We believe it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an "umbrella partnership REIT," or UPREIT. MAA's interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA's percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the limited partners. MAA's only material asset is its ownership of limited partner interests in the Operating Partnership; therefore, MAA does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time-to-time and guaranteeing certain debt of the Operating Partnership. The Operating Partnership holds, directly or indirectly, all of our real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for limited partner interests, the Operating Partnership generates the capital required by the Company's business through the Operating Partnership's operations, direct or indirect incurrence of indebtedness and issuance of partnership units.

The presentation of MAA's shareholders' equity and the Operating Partnership's capital are the principal areas of difference between the consolidated financial statements of MAA and those of the Operating Partnership. MAA's shareholders' equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interest, preferred units, treasury shares, accumulated other comprehensive income and redeemable common units. The Operating Partnership's capital may include common capital and preferred capital of the general partner (MAA), limited partners' preferred capital, limited partners' noncontrolling interest, accumulated other comprehensive income and redeemable common units. Redeemable common units represent the number of outstanding OP Units as of the date of the applicable balance sheet, valued for conversion at the greater of the closing market price of MAA's common stock or the aggregate value of the individual partners' capital balances. Holders of common units in the Operating Partnership (other than MAA and its entity affiliates) may require the Operating Partnership to redeem their common units, in which case the Operating Partnership may, at its option, pay the redemption price either in cash (in an amount per common unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange, or “NYSE”, over a specified period of time prior to the redemption date) or by delivering one share of our common stock (subject to adjustment under specified circumstances) for each common unit so redeemed.

In order to highlight the material differences between MAA and the Operating Partnership, this report includes sections that separately present and discuss areas that are materially different between MAA and the Operating Partnership, including:


•	the consolidated financial statements in Item 1 of this report;


•	certain accompanying notes to the financial statements, including Note 3 - Earnings per Common Share of MAA and Note 4 - Earnings per OP Unit of MAALP; and Note 10 - Shareholders' Equity of MAA and Note 11 - Partners' Capital of MAALP;


•	the certifications of the Chief Executive Officer and Chief Financial Officer of MAA included as Exhibits 31 and 32 to this report.

In the sections that combine disclosure for MAA and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues debt, management believes this presentation is appropriate for the reasons set forth above and because the business is one enterprise and we operate the business through the Operating Partnership.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Balance Sheets

September 30, 2014 and December 31, 2013

(Unaudited)

(Dollars in thousands, except share data)



	September 30, 2014			December 31, 2013
Assets:
Real estate assets:
Land	$	872,786		$	871,316
Buildings and improvements	6,595,550			6,366,701
Furniture, fixtures and equipment	208,653			199,573
Development and capital improvements in progress	59,161			166,048
	7,736,150			7,603,638
Less accumulated depreciation	(1,288,374		)	(1,124,207		)
	6,447,776			6,479,431

Undeveloped land	58,700			63,850
Corporate properties, net	8,263			7,523
Investments in real estate joint ventures	1,802			5,499
Real estate assets, net	6,516,541			6,556,303

Cash and cash equivalents	87,766			89,333
Restricted cash	59,786			44,361
Deferred financing costs, net	17,870			17,424
Other assets	62,996			91,637
Goodwill	2,321			4,106
Assets held for sale	35,734			38,761
Total assets	$	6,783,014		$	6,841,925

Liabilities and Shareholders' Equity:
Liabilities:
Secured notes payable	$	1,554,592		$	1,790,935
Unsecured notes payable	1,875,422			1,681,783
Accounts payable	10,089			15,067
Fair market value of interest rate swaps	13,132			20,015
Accrued expenses and other liabilities	238,849			206,268
Security deposits	9,970			9,270
Total liabilities	3,702,054			3,723,338

Redeemable stock	5,028			5,050

Shareholders' equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 75,242,266 and 74,830,726 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively (1)	752			747
Additional paid-in capital	3,616,847			3,599,549
Accumulated distributions in excess of net income	(705,022		)	(653,593		)
Accumulated other comprehensive income	396			108
Total MAA shareholders' equity	2,912,973			2,946,811
Noncontrolling interest	162,959			166,726
Total equity	3,075,932			3,113,537
Total liabilities and equity	$	6,783,014		$	6,841,925


⁽¹⁾	Number of shares issued and outstanding represent total shares of common stock regardless of classification on the consolidated balance sheet. The number of shares classified as redeemable stock on the consolidated balance sheet for September 30, 2014 and December 31, 2013 are 85,164 and 83,139, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Operations

Three and nine months ended September 30, 2014 and 2013

(Unaudited)

(Dollars in thousands, except per share data)



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Operating revenues:
Rental revenues	$	225,789		$	124,612		$	669,387		$	363,445
Other property revenues	22,981			10,648			67,266			31,217
Total property revenues	248,770			135,260			736,653			394,662
Management fee income	11			146			169			465
Total operating revenues	248,781			135,406			736,822			395,127
Property operating expenses:
Personnel	26,355			14,930			76,447			43,332
Building repairs and maintenance	8,703			4,554			22,286			11,557
Real estate taxes and insurance	30,918			16,741			92,735			48,187
Utilities	14,874			7,506			41,534			20,900
Landscaping	4,002			2,894			15,391			8,595
Other operating	15,781			9,068			47,225			26,464
Depreciation and amortization	70,222			32,766			229,866			97,183
Total property operating expenses	170,855			88,459			525,484			256,218
Acquisition expense	13			—			971			499
Property management expenses	7,429			4,970			24,019			15,301
General and administrative expenses	6,511			3,976			16,065			10,604
Merger related expenses	331			5,561			3,202			11,298
Integration related expenses	147			35			7,140			35
Income from continuing operations before non-operating items	63,495			32,405			159,941			101,172
Interest and other non-property income	85			16			1,166			86
Interest expense	(28,251		)	(14,923		)	(89,090		)	(45,657		)
Loss on debt extinguishment/modification	(2,586		)	(218		)	(2,586		)	(387		)
Amortization of deferred financing costs	(1,000		)	(820		)	(3,485		)	(2,427		)
Net casualty (loss) gain after insurance and other settlement proceeds	(126		)	—			(431		)	455
Gain on sale of depreciable real estate assets excluded from discontinued operations	36,032			—			42,254			—
Gain on sale of non-depreciable real estate assets	—			—			535			—
Income before income tax expense	67,649			16,460			108,304			53,242
Income tax expense	(442		)	(223		)	(1,235		)	(669		)
Income from continuing operations before joint venture activity	67,207			16,237			107,069			52,573
Gain from real estate joint ventures	3,124			60			6,019			161
Income from continuing operations	70,331			16,297			113,088			52,734
Discontinued operations:
Income from discontinued operations before (loss) gain on sale	488			972			1,353			4,451
Net casualty gain (loss) after insurance and other settlement proceeds on discontinued operations	3			(1		)	—			(5		)
(Loss) gain on sale of discontinued operations	(103		)	28,788			5,378			71,909
Consolidated net income	70,719			46,056			119,819			129,089
Net income attributable to noncontrolling interests	3,743			1,772			6,364			4,536
Net income available for MAA common shareholders	$	66,976		$	44,284		$	113,455		$	124,553

Earnings per common share - basic:
Income from continuing operations available for common shareholders	$	0.89		$	0.37		$	1.43		$	1.19
Discontinued property operations	—			0.67			0.08			1.73
Net income available for common shareholders	$	0.89		$	1.04		$	1.51		$	2.92

Earnings per common share - diluted:
Income from continuing operations available for common shareholders	$	0.89		$	0.37		$	1.43		$	1.19
Discontinued property operations	—			0.67			0.08			1.72
Net income available for common shareholders	$	0.89		$	1.04		$	1.51		$	2.91

Dividends declared per common share	$	0.7300		$	0.6950		$	2.1900		$	2.0850

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Comprehensive Income

Three and nine months ended September 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Consolidated net income	$	70,719		$	46,056		$	119,819		$	129,089
Other comprehensive income:
Unrealized (losses) gains from the effective portion of derivative instruments	(696		)	(1,826		)	(9,096		)	10,096
Reclassification adjustment for net losses included in net income for the effective portion of derivative instruments	2,589			3,621			9,399			12,098
Total comprehensive income	72,612			47,851			120,122			151,283
Less: comprehensive income attributable to noncontrolling interests	(3,845		)	(1,830		)	(6,379		)	(5,275		)
Comprehensive income attributable to MAA	$	68,767		$	46,021		$	113,743		$	146,008

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Cash Flows

Nine months ended September 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Nine months ended September 30,
	2014			2013
Cash flows from operating activities:
Consolidated net income	$	119,819		$	129,089
Adjustments to reconcile net income to net cash provided by operating activities:
Retail revenue accretion	(17		)	(29		)
Depreciation and amortization	233,312			102,158
Stock compensation expense	3,180			1,729
Redeemable stock issued	690			535
Amortization of debt premium	(20,121		)	(948		)
Gain from investments in real estate joint ventures	(3,159		)	(161		)
Loss on debt extinguishment	2,586			387
Derivative interest (credit) expense	(2,543		)	827
Settlement of forward swaps	(3,625		)	—
Gain on sale of non-depreciable real estate assets	(535		)	—
Gain on sale of depreciable real estate assets excluded from discontinued operations	(42,254		)	—
Gain on sale of discontinued operations	(5,378		)	(71,909		)
Net casualty loss (gain) and other settlement proceeds	431			(450		)
Changes in assets and liabilities:
Restricted cash	15,062			(391		)
Other assets	(5,016		)	(7,611		)
Accounts payable	(1,665		)	2,377
Accrued expenses and other	31,630			12,951
Security deposits	688			223
Net cash provided by operating activities	323,085			168,777
Cash flows from investing activities:
Purchases of real estate and other assets	(180,272		)	(89,866		)
Normal capital improvements	(71,140		)	(35,412		)
Construction capital and other improvements	(4,456		)	(3,873		)
Renovations to existing real estate assets	(11,950		)	(8,616		)
Development	(40,752		)	(26,129		)
Distributions from real estate joint ventures	15,964			8,311
Contributions to real estate joint ventures	—			(183		)
Proceeds from disposition of real estate assets	241,691			118,783
Funding of escrow for future acquisitions	(30,487		)	(57,380		)
Net cash used in investing activities	(81,402		)	(94,365		)
Cash flows from financing activities:
Net change in credit lines	(216,184		)	177,000
Proceeds from notes payable	396,532			—
Principal payments on notes payable	(258,105		)	(8,695		)
Payment of deferred financing costs	(4,156		)	(2,655		)
Repurchase of common stock	(456		)	(682		)
Proceeds from issuances of common shares	728			25,038
Exercise of stock options	11,916			—
Distributions to noncontrolling interests	(9,227		)	(3,574		)
Dividends paid on common shares	(164,298		)	(88,814		)
Net cash (used in) provided by financing activities	(243,250		)	97,618
Net (decrease) increase in cash and cash equivalents	(1,567		)	172,030
Cash and cash equivalents, beginning of period	89,333			9,075
Cash and cash equivalents, end of period	$	87,766		$	181,105

Supplemental disclosure of cash flow information:
Interest paid	$	101,252		$	48,534
Income taxes paid	$	1,596		$	803
Supplemental disclosure of noncash investing and financing activities:
Conversion of units to shares of common stock	$	992		$	550
Accrued construction in progress	$	6,539		$	4,190
Interest capitalized	$	1,253		$	1,118
Marked-to-market adjustment on derivative instruments	$	6,471		$	21,367
Fair value adjustment on debt assumed	$	2,720		$	704
Loan assumption	$	52,521		$	18,293

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Balance Sheets

September 30, 2014 and December 31, 2013

(Dollars in thousands, except unit data)



	September 30, 2014			December 31, 2013
Assets:
Real estate assets:
Land	$	872,786		$	871,316
Buildings and improvements	6,595,550			6,366,701
Furniture, fixtures and equipment	208,653			199,573
Development and capital improvements in progress	59,161			166,048
	7,736,150			7,603,638
Less accumulated depreciation	(1,288,374		)	(1,124,207		)
	6,447,776			6,479,431

Undeveloped land	58,700			63,850
Corporate properties, net	8,263			7,523
Investments in real estate joint ventures	1,802			5,499
Real estate assets, net	6,516,541			6,556,303

Cash and cash equivalents	87,766			89,333
Restricted cash	59,786			44,361
Deferred financing costs, net	17,870			17,424
Other assets	62,996			91,637
Goodwill	2,321			4,106
Assets held for sale	35,734			38,761
Total assets	$	6,783,014		$	6,841,925

Liabilities and Capital:
Liabilities:
Secured notes payable	$	1,554,592		$	1,790,935
Unsecured notes payable	1,875,422			1,681,783
Accounts payable	10,089			15,067
Fair market value of interest rate swaps	13,132			20,015
Accrued expenses and other liabilities	238,849			206,268
Security deposits	9,970			9,270
Due to general partner	19			19
Total liabilities	3,702,073			3,723,357

Redeemable units	5,028			5,050

Capital:
General partner: 75,242,266 OP Units outstanding at September 30, 2014 and 74,830,726 OP Units outstanding at December 31, 2013 ⁽¹⁾	2,912,499			2,946,598
Limited partners: 4,202,123 OP Units outstanding at September 30, 2014 and 4,227,384 OP Units outstanding at December 31, 2013 (1)	162,937			166,746
Accumulated other comprehensive income	477			174
Total capital	3,075,913			3,113,518
Total liabilities and capital	$	6,783,014		$	6,841,925


⁽¹⁾	Number of units outstanding represent total OP Units regardless of classification on the consolidated balance sheet. The number of units classified as redeemable units on the consolidated balance sheet at September 30, 2014 and December 31, 2013 are 85,164 and 83,139, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Operations

Three and nine months ended September 30, 2014 and 2013

(Unaudited)

(Dollars in thousands, except per unit data)



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Operating revenues:
Rental revenues	$	225,789		$	124,612		$	669,387		$	363,445
Other property revenues	22,981			10,648			67,266			31,217
Total property revenues	248,770			135,260			736,653			394,662
Management fee income	11			146			169			465
Total operating revenues	248,781			135,406			736,822			395,127
Property operating expenses:
Personnel	26,355			14,930			76,447			43,332
Building repairs and maintenance	8,703			4,554			22,286			11,557
Real estate taxes and insurance	30,918			16,741			92,735			48,187
Utilities	14,874			7,506			41,534			20,900
Landscaping	4,002			2,894			15,391			8,595
Other operating	15,781			9,068			47,225			26,464
Depreciation and amortization	70,222			32,766			229,866			97,183
Total property operating expenses	170,855			88,459			525,484			256,218
Acquisition expense	13			—			971			499
Property management expenses	7,429			4,970			24,019			15,301
General and administrative expenses	6,511			3,976			16,065			10,604
Merger related expenses	331			5,561			3,202			11,298
Integration related expenses	147			35			7,140			35
Income from continuing operations before non-operating items	63,495			32,405			159,941			101,172
Interest and other non-property income	85			16			1,166			86
Interest expense	(28,251		)	(14,923		)	(89,090		)	(45,657		)
Loss on debt extinguishment/modification	(2,586		)	(218		)	(2,586		)	(387		)
Amortization of deferred financing costs	(1,000		)	(820		)	(3,485		)	(2,427		)
Net casualty (loss) gain after insurance and other settlement proceeds	(126		)	—			(431		)	455
Gain on sale of depreciable real estate assets excluded from discontinued operations	36,032			—			42,254			—
Gain on sale of non-depreciable real estate assets	—			—			535			—
Income before income tax expense	67,649			16,460			108,304			53,242
Income tax expense	(442		)	(223		)	(1,235		)	(669		)
Income from continuing operations before joint venture activity	67,207			16,237			107,069			52,573
Gain from real estate joint ventures	3,124			60			6,019			161
Income from continuing operations	70,331			16,297			113,088			52,734
Discontinued operations:
Income from discontinued operations before (loss) gain on sale	488			973			1,353			4,054
Net casualty gain (loss) after insurance and other settlement proceeds on discontinued operations	3			(1		)	—			(5		)
(Loss) gain on sale of discontinued operations	(103		)	28,806			5,378			60,585
Net income available for Mid-America Apartments, L.P. common unitholders	$	70,719		$	46,075		$	119,819		$	117,368

Earnings per common unit - basic:
Income from continuing operations available for common unitholders	$	0.89		$	0.37		$	1.43		$	1.19
Income from discontinued operations available for common unitholders	—			0.67			0.08			1.46
Net income available for common unitholders	$	0.89		$	1.04		$	1.51		$	2.65

Earnings per common unit - diluted:
Income from continuing operations available for common unitholders	$	0.89		$	0.37		$	1.43		$	1.19
Income from discontinued operations available for common unitholders	—			0.67			0.08			1.46
Net income available for common unitholders	$	0.89		$	1.04		$	1.51		$	2.65

Distributions declared per common unit	$	0.7300		$	0.6950		$	2.1900		$	2.0850

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Comprehensive Income

Three and nine months ended September 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Net income available for Mid-America Apartments, L.P. common unitholders	$	70,719		$	46,075		$	119,819		$	117,368
Other comprehensive income:
Unrealized (losses) gains from the effective portion of derivative instruments	(696		)	(1,826		)	(9,096		)	10,096
Reclassification adjustment for net losses included in net income for the effective portion of derivative instruments	2,589			3,621			9,399			12,098
Comprehensive income attributable to Mid-America Apartments, L.P.	$	72,612		$	47,870		$	120,122		$	139,562

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Cash Flows

Nine months ended September 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Nine months ended September 30,
	2014			2013
Cash flows from operating activities:
Consolidated net income	$	119,819		$	117,368
Adjustments to reconcile net income to net cash provided by operating activities:
Retail revenue accretion	(17		)	(29		)
Depreciation and amortization	233,312			101,923
Stock compensation expense	3,180			1,729
Redeemable units issued	690			535
Amortization of debt premium	(20,121		)	(948		)
Gain from investments in real estate joint ventures	(3,159		)	(161		)
Loss on debt extinguishment	2,586			387
Derivative interest (credit) expense	(2,543		)	827
Settlement of forward swaps	(3,625		)	—
Gain on sale of non-depreciable real estate assets	(535		)	—
Gain on sale of depreciable real estate assets excluded from discontinued operations	(42,254		)	—
Gain on sale of discontinued operations	(5,378		)	(60,585		)
Net casualty loss (gain) and other settlement proceeds	431			(450		)
Changes in assets and liabilities:
Restricted cash	15,062			(390		)
Other assets	(5,016		)	(7,740		)
Accounts payable	(1,665		)	2,409
Accrued expenses and other	31,630			13,200
Security deposits	688			242
Net cash provided by operating activities	323,085			168,317
Cash flows from investing activities:
Purchases of real estate and other assets	(180,272		)	(89,866		)
Normal capital improvements	(71,140		)	(35,451		)
Construction capital and other improvements	(4,456		)	(3,873		)
Renovations to existing real estate assets	(11,950		)	(8,616		)
Development	(40,752		)	(26,129		)
Distributions from real estate joint ventures	15,964			8,311
Contributions to real estate joint ventures	—			(183		)
Proceeds from disposition of real estate assets	241,691			102,204
Funding of escrow for future acquisitions	(30,487		)	(57,380		)
Net cash used in investing activities	(81,402		)	(110,983		)
Cash flows from financing activities:
Advances from general partner	—			17,219
Net change in credit lines	(216,184		)	177,000
Proceeds from notes payable	396,532			—
Principal payments on notes payable	(258,105		)	(8,695		)
Payment of deferred financing costs	(4,156		)	(2,655		)
Repurchase of common units	(456		)	(682		)
Proceeds from issuances of common units	728			25,038
Exercise of unit options	11,916			—
Distributions paid on common units	(173,525		)	(92,388		)
Net cash (used in) provided by financing activities	(243,250		)	114,837
Net (decrease) increase in cash and cash equivalents	(1,567		)	172,171
Cash and cash equivalents, beginning of period	89,333			8,934
Cash and cash equivalents, end of period	$	87,766		$	181,105

Supplemental disclosure of cash flow information:
Interest paid	$	101,252		$	48,534
Income taxes paid	$	1,596		$	803
Supplemental disclosure of noncash investing and financing activities:
Accrued construction in progress	$	6,539		$	4,190
Interest capitalized	$	1,253		$	1,118
Marked-to-market adjustment on derivative instruments	$	6,471		$	21,367
Fair value adjustment on debt assumed	$	2,720		$	704
Loan assumption	$	52,521		$	18,293

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P.

Notes to Condensed Consolidated Financial Statements

September 30, 2014 and 2013

(Unaudited)

1. Basis of Presentation and Principles of Consolidation and Significant Accounting Policies

Unless the context otherwise requires, all references to "we," "us," "our," or the "Company" refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, all references to “MAA” refers only to Mid-America Apartment Communities, Inc., and not any of its consolidated subsidiaries. Unless the context otherwise requires, the references to the “Operating Partnership” or “MAALP” refer to Mid-America Apartments, L.P. together with its consolidated subsidiaries. “Common stock” refers to the common stock of MAA and “shareholders” means the holders of shares of MAA’s common stock. The limited partnership interests of the Operating Partnership are referred to as “OP Units” and the holders of the OP Units are referred to as “unitholders”.

We believe combining the notes to the consolidated financial statements results in the following benefits:


•	enhances a readers' understanding of MAA and the Operating Partnership by enabling the reader to view the business as a whole in the same manner that management views and operates the business;


•	eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both MAA and the Operating Partnership.


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. We believe it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an "umbrella partnership REIT," or UPREIT. MAA's interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA's percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the limited partners. MAA's only material asset is its ownership of limited partner interests in the Operating Partnership; therefore, MAA does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. The Operating Partnership holds, directly or indirectly, all of our real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates the capital required by our business through the Operating Partnership's operations, direct or indirect incurrence of indebtedness and issuance of partnership units.

On October 1, 2013, MAA acquired Colonial Properties Trust, or Colonial, when Colonial was merged with and into MAA, with MAA being the surviving entity of the merger, pursuant to an agreement and plan of merger, which is referred to as the parent merger or the merger, and Martha Merger Sub, LP, or OP Merger Sub, a wholly-owned indirect subsidiary of MAALP, merged with and into Colonial Realty Limited Partnership, or Colonial LP, with Colonial LP being the surviving entity of the merger and becoming a wholly-owned indirect subsidiary of MAALP, which is referred to as the partnership merger. Under the terms of the merger agreement, each Colonial common share was converted into the right to receive 0.36 of a newly issued share of MAA common stock. In addition, each limited partner interest in Colonial LP designated as a “Class A Unit” and a “Partnership Unit” under the limited partnership agreement of Colonial LP, which we refer to in this filing as Colonial LP units, issued and outstanding immediately prior to the effectiveness of the partnership merger was converted into common units in MAALP at the 0.36 conversion rate. The net assets and results of operations of Colonial are included in our consolidated financial statements from the closing date, October 1, 2013 going forward.

As of September 30, 2014, we owned and operated 265 apartment communities comprising 81,137 apartments located in 14 states principally through the Operating Partnership, and we also owned an interest in the following unconsolidated real estate joint ventures:



	Percent Owned	Number of Units/Square Feet
Multifamily:
McKinney ⁽¹⁾	25.00%	—

Commercial:
Land Title Building	33.30%	29,971

⁽¹⁾ This joint venture consists of undeveloped land.

As of September 30, 2014, we had two development communities under construction totaling 514 units, with no units completed. Total expected costs for the development projects are $72.9 million, of which $49.2 million has been incurred through September 30, 2014. We expect to complete construction on one of the two projects by the first quarter of 2015 and on the other by the second quarter of 2015. Four of our multifamily properties include retail components with approximately 100,000 square feet of gross leasable area. We also have three wholly owned commercial properties, which we acquired through our merger with Colonial with approximately 287,000 square feet of gross leasable area, excluding tenant owned anchor stores, and one partially owned commercial property with approximately 30,000 square feet of gross leasable area.

Out of Period Adjustment

During the three months ended September 30, 2014, we reviewed our reconciliation of accumulated other comprehensive income, or AOCI. During this review, we noted that balances attributable to certain off-market interest rate swaps had accumulated in AOCI. As a result of this review, in the current quarter we recorded a $2.3 million non-cash adjustment to interest expense related to certain off-market derivative contracts acquired with the merger. This represents a cumulative adjustment for the one year period ended September 30, 2014 required by Accounting Standards Codification, or ASC, 815 to properly reflect the AOCI related to these off-market derivative contracts. The impact of the misstatement caused Net income available for MAA common shareholders to be understated by approximately $0.8 million, or $0.01 per diluted share for the year ended December 31, 2013. Total MAA shareholders' equity would not be affected by this adjustment. Because we believe the impact to Net income available for MAA common shareholders, EPS, and Total MAA shareholders' equity would not impact the readers of these financial statements, we deemed the out of period portion of this adjustment to be immaterial to the current period and all periods presented.

Reclassifications

In order to present comparative financial statements, certain reclassifications have been made. We previously reported approximately $9.5 million of cash proceeds from stock option exercises within Cash flows from operating activities for the six months ended June 30, 2014. This line has been reclassified to Cash flows from financing activities for the nine months ended September 30, 2014. In addition, we previously reported $6.2 million of Gain on sale of depreciable real-estate assets excluded from discontinued operations and $0.5 million of Gain on sale of non-depreciable real-estate assets as separate items below Discontinued operations on our Statement of Operations for the six months ended June 30, 2014. These two lines have been reclassified into Income from continuing operations for all periods presented as allowed under Accounting Standards Update, or ASU, 2014-08. The reclassifications had no effect on Net income available for MAA common shareholders.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared by our management in accordance with United States generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC. The consolidated financial statements of MAA presented herein include the accounts of MAA, the Operating Partnership, and all other subsidiaries in which MAA has a controlling financial interest. MAA owns approximately 95% to 100% of all consolidated subsidiaries. The consolidated financial statements of MAALP presented herein include the accounts of MAALP and all other subsidiaries in which MAALP has a controlling financial interest. MAALP owns, directly or indirectly, 100% of all consolidated subsidiaries. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included, and all such adjustments were of a normal, recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

We invest in entities which may qualify as variable interest entities, or VIE. A VIE is a legal entity in which the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power to direct the activities of a legal entity as well as the obligation to absorb its expected losses or the right to receive its expected residual returns. We consolidate all VIEs for which we are the primary beneficiary and use the equity method to account for investments that qualify as VIEs but for which we are not the primary beneficiary. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including but not limited to, those activities that most significantly impact the VIE's economic performance and which party controls such activities.

We use the equity method of accounting for our investments in entities for which we exercise significant influence, but do not have the ability to exercise control. These entities are not variable interest entities. The factors considered in determining that we do not have the ability to exercise control include ownership of voting interests and participatory rights of investors.

2. Business Combinations

Merger of MAA and Colonial

On October 1, 2013, MAA completed its merger with Colonial. As part of the merger, we acquired 115 wholly-owned apartment communities encompassing 34,370 units principally located in the Southeast and Southwest regions of the United States. In addition to the apartment communities, we also acquired four commercial properties totaling approximately 806,000 square feet. The additions have caused us to nearly double in size as a result of the merger. The net assets and results of operations of Colonial are included in our consolidated financial statements from the closing date, October 1, 2013, going forward.

The total purchase price of approximately $2.2 billion was determined based on the number of Colonial shares and Colonial OP Units outstanding as of October 1, 2013. In all cases in which MAA’s stock price was a determining factor in arriving at final consideration for the merger, the stock price used to determine the purchase price was the opening price of MAA’s common stock on October 1, 2013 ($62.56 per share). The total purchase price includes $7.3 million of other consideration, a majority of which relates to assumed stock compensation plans. As a result of the merger, we issued approximately 31.9 million shares of MAA common stock and approximately 2.6 million OP units.

The acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values.

For larger, portfolio style acquisitions, like the merger, management engages a third party valuation specialist to assist with the fair value assessment, which includes an allocation of the purchase price. Similar to management's methods, the third party generally uses cash flow analysis as well as an income approach and a market approach to determine the fair value of assets acquired. The third party uses stabilized NOI and a market specific capitalization and discount rates. Management reviews the inputs used by the third party specialist as well as the allocation of the purchase price provided by the third party to ensure reasonableness and that the procedures are performed in accordance with management's policy. The allocation of the purchase price is based on management’s assessment, which may differ as more information becomes available. Subsequent adjustments made to the purchase price allocation, if any, are made within the allocation period, which typically does not exceed one year.

The allocation of the purchase price described above requires a significant amount of judgment and represents the Company's best estimate of the fair value as of the acquisition date. The following final purchase price allocation was based on our

valuation as well as estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed.

The following table summarizes the final purchase price allocation (in thousands):



Land	$	469,396
Buildings and improvements	3,080,858
Furniture, fixtures and equipment	96,377
Development and capital improvements in progress	113,368
Undeveloped land	58,400
Properties held for sale	33,300
Lease intangible assets	57,946
Cash and cash equivalents	63,454
Restricted cash	6,825
Deferred costs and other assets, excluding lease intangible assets	86,141
Total assets acquired	4,066,065

Notes payable	(1,759,550)
Fair market value of interest rate swaps	(14,961)
Accounts payable, accrued expenses, and other liabilities	(128,678)
Total liabilities assumed, including debt	(1,903,189		)

Total purchase price	$	2,162,876

We incurred merger and integration related expenses of $10.3 million for the nine months ended September 30, 2014. These amounts were expensed as incurred and are included in the Consolidated Statement of Operations in the items titled Merger related expenses, primarily consisting of severance, legal, and professional costs and Integration related expenses, primarily related to temporary systems, staffing, and facilities costs.

The allocation of fair values of the assets acquired and liabilities assumed has changed by an immaterial amount from the allocation reported in Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note 2 of our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 21, 2014. The changes were based on information concerning the subject assets and liabilities that was not yet known at the time of the 10-K filing. These adjustments had no material impact on the purchase price allocation, the consolidated balance sheet or the results of operations.

3. Earnings per Common Share of MAA

Basic earnings per share is computed by dividing net income attributable to common shareholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share. Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis with our diluted earnings per share being the more dilutive of the treasury stock or two-class methods. Operating Partnership units are included in dilutive earnings per share calculations when they are dilutive to earnings per share. For the three and nine months ended September 30, 2014 and 2013, MAA's basic earnings per share is computed using the two-class method, and our diluted earnings per share is computed using the more dilutive of the treasury stock method or two-class method:



(dollars and shares in thousands, except per share amounts)	Three months ended September 30,								Nine months ended September 30,
	2014				2013				2014				2013
Shares Outstanding
Weighted average common shares - basic	75,058				42,702				74,937				42,583
Weighted average partnership units outstanding	—			⁽¹⁾	—			⁽¹⁾	—			⁽¹⁾	1,709
Effect of dilutive securities	—			⁽¹⁾	—			⁽¹⁾	—			⁽¹⁾	53
Weighted average common shares - diluted	75,058				42,702				74,937				44,345

Calculation of Earnings per Share - basic
Income from continuing operations	$	70,331			$	16,297			$	113,088			$	52,734
Income from continuing operations attributable to noncontrolling interests	(3,722		)		(632		)		(6,005		)		(1,973		)
Income from continuing operations allocated to unvested restricted shares	(130		)		(14		)		(209		)		(46		)
Income from continuing operations available for common shareholders, adjusted	$	66,479			$	15,651			$	106,874			$	50,715

Income from discontinued operations	$	388			$	29,759			$	6,731			$	76,355
Income from discontinued operations attributable to noncontrolling interest	(21		)		(1,140		)		(359		)		(2,563		)
Income from discontinued operations allocated to unvested restricted shares	(1		)		(25		)		(12		)		(67		)
Income from discontinued operations available for common shareholders, adjusted	$	366			$	28,594			$	6,360			$	73,725

Weighted average common shares - basic	75,058				42,702				74,937				42,583
Earnings per share - basic	$	0.89			$	1.04			$	1.51			$	2.92

Calculation of Earnings per Share - diluted
Income from continuing operations	$	70,331			$	16,297			$	113,088			$	52,734
Income from continuing operations attributable to noncontrolling interests	(3,725		)	⁽¹⁾	(632		)	⁽¹⁾	(6,005		)	⁽¹⁾	—
Income from continuing operations allocated to unvested restricted shares	(130		)	⁽¹⁾	(14		)	⁽¹⁾	(209		)	⁽¹⁾	—
Income from continuing operations available for common shareholders, adjusted	$	66,476			$	15,651			$	106,874			$	52,734

Income from discontinued operations	$	388			$	29,759			$	6,731			$	76,355
Income from discontinued operations attributable to noncontrolling interest	(21		)	⁽¹⁾	(1,140		)	⁽¹⁾	(357		)	⁽¹⁾	—
Income from discontinued operations allocated to unvested restricted shares	(1		)	⁽¹⁾	(25		)	⁽¹⁾	(12		)	⁽¹⁾	—
Income from discontinued operations available for common shareholders, adjusted	$	366			$	28,594			$	6,362			$	76,355

Weighted average common shares - diluted	75,058				42,702				74,937				44,345
Earnings per share - diluted	$	0.89			$	1.04			$	1.51			$	2.91

⁽¹⁾ Operating partnership units, other dilutive securities, and the related income with each are not included in the diluted earnings per share calculations as they were not dilutive.

4. Earnings per OP Unit of MAALP

Basic earnings per OP Unit is computed by dividing net income available for common unitholders by the weighted average number of units outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common unitholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per OP unit. Diluted earnings per OP Unit reflects the potential dilution that could occur if securities or other contracts to issue OP Units were exercised or converted into OP Units. A reconciliation of the numerators and denominators of the basic and diluted earnings per unit computations for the three and nine months ended September 30, 2014 and 2013 is presented below:



(dollars and units in thousands, except per unit amounts)	Three months ended September 30,								Nine months ended September 30,
	2014				2013				2014				2013
Units Outstanding
Weighted average common units - basic	79,263				44,408				79,148				44,293
Effect of dilutive securities	—			⁽¹⁾	—			⁽¹⁾	—			⁽¹⁾	53
Weighted average common units - diluted	79,263				44,408				79,148				44,346

Calculation of Earnings per Unit - basic
Income from continuing operations	$	70,331			$	16,297			$	113,088			$	52,734
Income from continuing operations allocated to unvested restricted shares	(130		)		(14		)		(209		)		(46		)
Income from continuing operations available for common unitholders, adjusted	$	70,201			$	16,283			$	112,879			$	52,688

Income from discontinued operations	$	388			$	29,778			$	6,731			$	64,634
Income from discontinued operations allocated to unvested restricted shares	(1		)		(25		)		(12		)		(56		)
Income from discontinued operations available for common unitholders, adjusted	$	387			$	29,753			$	6,719			$	64,578

Weighted average common units - basic	79,263				44,408				79,148				44,293
Earnings per unit - basic:	$	0.89			$	1.04			$	1.51			$	2.65

Calculation of Earnings per Unit - diluted
Income from continuing operations	$	70,331			$	16,297			$	113,088			$	52,734
Income from continuing operations allocated to unvested restricted shares	(130		)	⁽¹⁾	(14		)	⁽¹⁾	(209		)	⁽¹⁾	—
Income from continuing operations available for common unitholders, adjusted	$	70,201			$	16,283			$	112,879			$	52,734

Income from discontinued operations	$	388			$	29,778			$	6,731			$	64,634
Income from discontinued operations allocated to unvested restricted shares	(1		)	⁽¹⁾	(25		)	⁽¹⁾	(12		)	⁽¹⁾	—
Income from discontinued operations available for common unitholders, adjusted	$	387			$	29,753			$	6,719			$	64,634

Weighted average common units - diluted	79,263				44,408				79,148				44,346
Earnings per unit - diluted:	$	0.89			$	1.04			$	1.51			$	2.65

⁽¹⁾ Dilutive securities and the related income are not included in the diluted earnings per unit calculations as they were not dilutive.

5. MAA Equity

Total equity and its components for the nine-month periods ended September 30, 2014 and 2013 were as follows (dollars in thousands, except per share and per unit data):



	Mid-America Apartment Communities, Inc. Shareholders
	Common Stock Amount		Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest			Total Equity
EQUITY BALANCE DECEMBER 31, 2013	$	747	$	3,599,549		$	(653,593	)	$	108	$	166,726		$	3,113,537
Net income						113,455					6,364			119,819
Other comprehensive income - derivative instruments (cash flow hedges)									288		15			303
Issuance and registration of common shares	2		726											728
Shares repurchased and retired	—		(456		)									(456		)
Exercise of stock options	3		11,913											11,916
Shares issued in exchange for units	—		992								(992		)	—
Shares issued in exchange from redeemable stock			998											998
Redeemable stock fair market value						(286		)						(286		)
Adjustment for noncontrolling interest ownership in operating partnership			(55		)						55			—
Amortization of unearned compensation			3,180											3,180
Dividends on common stock ($2.19 per share)						(164,598		)			—			(164,598		)
Dividends on noncontrolling interest units ($2.19 per unit)											(9,209		)	(9,209		)
EQUITY BALANCE SEPTEMBER 30, 2014	$	752	$	3,616,847		$	(705,022	)	$	396	$	162,959		$	3,075,932



	Mid-America Apartment Communities, Inc. Shareholders
	Common Stock Amount		Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total Equity
EQUITY BALANCE DECEMBER 31, 2012	$	422	$	1,542,999		$	(603,315	)	$	(26,054	)	$	31,058		$	945,110
Net income						124,553						4,536			129,089
Other comprehensive income - derivative instruments (cash flow hedges)									21,455			739			22,194
Issuance and registration of common shares	4		25,034												25,038
Shares repurchased and retired	—		(682		)										(682		)
Shares issued in exchange for units	1		549									(550		)	—
Redeemable stock fair market value						209									209